5 Things to Consider while Applying for a Used Car Loan Online - Car Loan Blog - Tata Capital

5 Points to Ponder Over while Applying Online for Second Hand Car Loan

Mar 02, 2017

The process of applying for a used car loan may be cumbersome for many individuals. There are various factors that need to be considered before borrowing a loan. It is necessary to understand what loan options are available in the market so as to land the best loan that suits your needs.

Very often, people rush through the process of seeking a used car loan. The excitement to drive your car home is certainly an exhilarating experience. However, it is essential to be well-equipped with necessary information. Loan seekers need to conduct a thorough research before applying for a used car loan online.

Here are five factors to consider while applying for second-hand car loans

  1. Type of loans

    There are various types of auto loans available in the market. The most common ones are secured loans, unsecured loans, pre-computed loans, and simple interest loans. Secured loans require a collateral, while unsecured loans are obtained without a guarantor or collateral. Pre-computed loans are loans where the interest and principal payments are calculated well in advance. Simple interest loans are similar to pre-computedloans, but interest is charged based on the outstanding amount. You may choose the type of loan according to your needs.
  2. Interest rates

    An important factor to consider while applying for used car loan is the rate of interest. Interest rates play a crucial role in deciding the amount of loan that has to be repaid. Hence, it is advisable to look for the best interest rate. Also, keep in mind that used car loan rates are slightly more expensive than new car loans.
  3. Loan tenure

    The duration of loan is an important aspect that needs to be considered. It determines the final cost of the car loan. The loan tenure and the amount of the EMI are inversely related. If the duration of the loan is longer, it indicates that the regular monthly installments will be lower, for a given loan amount and interest rate.
  4. Loan process

    Knowing the loan process is another factor that you need to keep in mind before approaching a lender. You need to gain information regarding loan eligibility, documentation, and how to apply for used car loan online. Now-a-days lenders have their online portals, enabling borrowers to apply for loans online. You may also check their loan application status, repayment schedule, and even find your balance amount online, at any given time.
  5. Down payment

    Providing a down payment is an important consideration in the loan approval process. Not all loans require down payments. However, a down payment helps to reduce your loan amount and monthly payments.

It is imperative to be aware of the factors that affect your chance of getting approval of a used car loan. You may also ask a loan official or an authorized dealer for advice of any sort. Remember, these factors will help improve your chances of obtaining loan approval. Hence, research thoroughly before applying for a used car loan online.